GUEST INFORMATION:

• Name: Evan Lange
• Title/Credentials: Charitable Planning Consultant, Five Star Legacy
• Background: Former charitable planning specialist at Signatory with over a decade of experience in charitable design. Law school graduate from UMKC who has helped families with pre-sale gifts, donor-advised funds, and private foundations.
• Connect with guest: Five Star Legacy consulting

EPISODE HIGHLIGHTS:

[00:02:21] – What Are Pre-Sale Gifts?

• Simple concept: gift appreciated assets before selling to avoid capital gains tax
• Key quote: “If you bought something for a hundred bucks, it’s now selling for a thousand dollars and you sell it, you have to pay tax on that $900 gain. Instead of selling that, let’s look at giving that asset to a charitable vehicle.”

[00:06:12] – The $5 Million Mistake

• Real story of donor who gave $5M cash after business sale instead of before
• Key quote: “If you would’ve gave the same amount percentage wise in stock in your company before the sale happened, he probably would’ve had like $7 million in his donor advised fund. He probably would’ve had another half a million dollars in his pocket just from tax savings.”

[00:12:51] – Critical Timing Considerations

• Must complete gift before binding obligation to sell
• Gray area between letters of intent and purchase agreements
• Key quote: “I’ve had clients that have made gifts of business interest on December 31st in the morning. And in the afternoon they signed a sale purchase agreement. That’s a little close for me.”

[00:18:56] – Donor-Advised Funds vs Private Foundations

• DAF: Maximum tax benefits, less control, public charity status
• Private Foundation: More control, limited tax deduction (often just cost basis)
• Key quote: “You give up some control for the tax benefits. On the other side is private foundations where you have the most control, but you give up some of the tax benefits.”

[00:25:32] – When to Choose Each Structure

• DAF threshold has moved from $1M to $20M+ for private foundation consideration
• Can use structures in combination for hybrid approaches
• Key quote: “I work with families that give tens of millions of dollars, sometimes hundreds of millions of dollars away every year through a donor-advised fund.”

[00:33:29] – Governance and Family Values

• Importance of clear guardrails and documented values
• Story of foundation that changed direction after founder’s death
• Key quote: “Be very clear in documents and think through where do I want to give? But then also… where are your passions? Where do you want to give?”

RESOURCES MENTIONED:

• Signatory: Faith-based donor-advised fund provider
• National Christian Foundation: Christian donor-advised fund organization
• Greater Kansas City Community Foundation: Community foundation with DAF services
• Form 1023: IRS application for tax-exempt status
• Form 990-T: Tax return for unrelated business income tax (UBIT)
• Form 990-PF: Private foundation tax return

KEY TAKEAWAYS:

1. 1. 1. Pre-sale gifts of appreciated assets can save millions in taxes compared to post-sale cash gifts
      2. Timing is critical – gifts must be completed before binding sale obligations
      3. Donor-advised funds offer maximum tax benefits with minimal setup costs and complexity
      4. Private foundations provide more control but require $20M+ to justify costs and complexity
      5. Clear governance documents and family values are essential regardless of structure chosen
      6. Professional guidance is crucial as most attorneys and CPAs don’t proactively suggest these strategies

CALL TO ACTION:

Don’t let your family miss out on significant tax savings and charitable impact. If you’re considering selling a business or highly appreciated assets, reach out to Story One Family Office to explore pre-sale gift strategies. Subscribe to the Story Lens podcast for more wealth planning insights, and share this episode with other business owners who could benefit from this critical planning opportunity.